Buyers Would Pay More to Copy Digital Music

As the copyright debate spins in recording industry boardrooms, Congressional hearing rooms and college dorm rooms, an upcoming survey of digital music suppliers and consumers suggests some common ground.

A key conclusion of the Jupiter Research study is that music fans — whether buying CDs in a store or downloading albums or individual tracks over the Internet — want to own the tunes and are willing to pay a premium to do so.

Nearly twice as many online consumers are willing to pay $17.99 for a CD that has unrestricted copy abilities versus a CD at only $9.99 that cannot be copied, the study concludes.

“Consumers are well-accustomed to having freedom to copy music as they see fit,” said Peter Sargent, a senior analyst at Jupiter Research, and author of the report. “It’s really been a right of passage. If I buy it, it’s mine to keep.”

While consumers’ willingness to pay more for an unencrypted disc may be music to the ears of the Recording Industry Association of America (RIAA), it doesn’t follow that jacking up prices is good businesses.

“The message for content providers is to be extremely careful about introducing copyright restrictions without considering sigifnicant reductions in price,” Sargent said. “Otherwise they risk a backlash.”

So far, it’s an understatement to say content providers are resisting the need to decrease prices, Sargent added. The companies are wary after seeing free content sharing sites such as Napster and its progeny cut into profits.

The study, which surveyed 1,700 online consumers and will be available in about two weeks, reached similar conclusions for movies.

Forty-one percent of respondents said they were willing to pay more for movies that could be copied. Since few DVDs can now be copied, the findings represent a significant opportunity.

“The concept is attractive, because so few consumers are currently doing it and because it could be introduced at premium prices,” Sargent said.

Despite the opportunities, there are high hurdles to clear to find a balance between digital content owners and consumers including workable encryption technologies, legislative and judicial issues concerning the application of the Digital Millenium Copyright Act, and the adoption of a widespread tiered pricing system.

Editor’s note: This Web site and Jupiter Research are owned by the same parent company, Jupitermedia Corp.

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